The new tax law is encouraging more Americans to use their homes as collateral for consumer loans, and banks -- particularly large ones -- are responding to the trend, a survey showed yesterday.

Banking industry and consumer groups, however, are warning that home equity loans have pitfalls and are not for everyone.

Consumers in 1986 borrowed $175 billion in second mortgages, $35 billion of that in the relatively new home equity loans, the American Bankers Association said, citing figures from the National Second Mortgage Association.

That compares with $150 billion in second mortgages and about $25 billion in home equity loans in 1985.

Firm figures on loan totals aren't available yet for this year, but SMR Research, a consulting firm in Budd Lake, N.J., is predicting that home equity loans could swell to $100 million out of a total second mortgage market of $200 million.

The tax law that took effect Jan. 1 appears to be fueling the trend. It phases out the deduction for most consumer loans, but leaves a loophole for most home loans.

Commercial banks, savings and loans and finance companies have been taking advantage of the loophole by offering revolving lines of credit secured by home equity. Not only are home equity loans tax deductible, their rate is lower than that of standard unsecured consumer loans.

According to the ABA, 92.7 percent of large commercial offered variable-rate home equity loans in 1986, compared with 75.4 percent in 1985.

Home equity loans can be a bad idea, according to Alan Fox of the Consumer Federation of America.

"If people become over-extended, if there's a severe recession and their job is threatened or income reduced, their ability to meet those payments will be severely affected and consequently there would be a potential for losing their homes," he said